Martin Lewis points Budget verdict on the way it will have an effect on pound in YOUR pocket
Money Saving Expert’s Martin Lewis has responded to the key details of this year’s budget after Rachel Reeves scrapped the two-child benefit cap and cut energy bills by £150 a year
Martin Lewis has issued his instant verdict on the Budget and how the key tax decisions will affect the pound in your pocket.
The Money Saving Expert founder said Chancellor Reeves’ second Budget – which saw her scrap the two-child benefit cap, lower energy bills and announce new council tax bands on homes worth over £2 million and £5 million –
Mr Lewis said he was “pleased” with the reform to charges on energy bills, and explained: “What they’re doing is taking some of the levies that I’ve been ranting about, and they’re going to be moving those into general taxation – they’re also getting rid of the ‘eco scheme’.
“This is going to mean a reduction of the unit rate – the amount you pay for each unit of energy you use – of around 3.4p off the electrivcity unit rate, and 0.3 per kWh off the gas unit rate. Overall, everything else remaining equal, this should be about £150 a year off a typical energy bill.”
But he said the “big question” is whether this will apply to fixed rate tariffs – and said he had been told by “someone very senior” that the “Government intends for companies to pass on these savings directly to consumers” and that they will be “working on it”.
“This should be a reduction on everybody’s bills from next April”, he added.
It comes after Mr Lewis slammed the Office for Budget Responsibility for their ‘staggering’ mistake which saw major decisions on tax and spending leaked hours before the Chancellor was due to address parliament. Martin wrote on Twitter : “This looks like staggering fat fingers from the OBR publishing budget outcome before the budget, govt will be fuming.”
Delving into the tweaks to Cash ISAs announced today, Martin Lewis added: “Cash ISA annual allowance cut to £12,000 (from £20,000) per tax year This will not apply to over 65s, who will keep £20,000 cash ISA limit The shares ISA will remain at £20,000.
“There’s logic in here based on the policy aims. While I would’ve preferred a carrot not stick approach – this isn’t as bad as it could’ve been, £12,000 per year is still a reasonable whack for many people. The stated aim was not to raise revenue but to encourage young people to invest rather than save – both for the economy but also because on average it outperforms.
This afternoon, the head of the OBR apologised for the “mistake” which led to the early publication of its Budget forecast.
“The document was unintentionally uploaded onto our website too early,” Richard Hughes, chairman of the organisation said as he started the watchdog’s presentation regarding its latest report.
“We’ve initiated an investigation into how and why it happened. That investigation will report into our oversight board, the Treasury and to the Treasury Committee and I will abide by their recommendations.”
When asked whether he would resign over the issue if asked to, he said: “I will abide by their recommendations.
“I will always serve so long as I have the confidence of the Chancellor and the Treasury Committee.
“We take it very seriously which is why we have initiated an investigation and why it will report to the Treasury and Treasury Committee.”
Rachel Reeves does not think the chairman of the Office for Budget Responsibility (OBR) should resign over the leak, which caused confusion on the financial and currency markets this morning. A spokesman for the Chancellor said: “The Chancellor has confidence in Richard Hughes.”
